Abreu, Luis, Jeon, Doh-Shin and Shahanaghi, Sara (2020) Homophily in Social Media and News Polarization. TSE Working Paper, n. 20-1081, Toulouse

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Abstract

We consider an ad-financed media firm that chooses the ideological location of its
news when consumers who directly receive the news can share it with their followers on
social media. When the firm maximizes the breadth of news sharing, it tends to produce
polarized news if the mean (the variance) of ideological locations of the followers of a
direct consumer is a convex (concave) function of the latter’s location. This implies
that it is the curvature, rather than the slope, of homophily that determines news
polarization so that surprisingly, larger homophily at the center (extremes) can lead to
(no) polarization.